Chapter 1

International
Project
Management
International
Project
Management
A Focus on HR Approach in
Multinational Corporations
Volume I
Hamid Doost Mohammadian
MOMENTUM PRESS, LLC, NEW YORK

International Project Management: A Focus on HR Approach in
Multinational Corporations, Volume I
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Abstract
A growing number of organizations take up an agile approach to projects

and implement a dedicated project management office (PMO) to ensure
better project performance (71% today compared to 68% back in 2016).
It might seem that project-based approach can be used only in certain
industries and, as such, can bring only limited value to the economy.
More and more organizations realize the value of project manage-
ment and implement its methods to drive strategic initiatives. Industries
that have never been project-oriented before—such as health care or pub-
lishing—are suddenly finding that with project management, they can bet-
ter reach their goals and save costs.
This causes a shift in strategic thinking. As a result, a demand for
project management talent grows steadily, as grows the number of organi-
zations with a PMO in their structure.
At the same time, not all senior executives and business owners fully
realize the value of project management yet. There is still a long way to
go, and we are going to see very exciting changes in the coming decade.
Value Engineering is one of the most key aims to identify and reduce
unnecessary costs.
The demand for project management specialists grows worldwide,
according to a recent report of the Project Management Institute (PMI). It
is expected that employers will need around 87.7 million project manage-
ment professionals by 2027.
Such an approach could shed more light on what particular human-
related issues may and should be taken into account in understanding
project management as a whole.
KeyWords
International Project; Project Management; International Project M

anage-
ment; Value Engineering; Multinational
Contents
List of Figures xi
List of Table xv
Introduction xvii
1 International Project Management 1
1.1 Definition of International Project Management 1
1.2 Understanding the Issues Standards in International
and Globalization Environment 2
1.3 Sustainability and the Issue Standards in International
and Globalization Environment 3
1.4 Competition and Value Chains 8
1.5 Multiple Cultures with Human Resource Approach 10
1.6 International Project Organizational Structures
Collaborative Project Enterprise 12
1.7 Structured and Rigorous Approach to Change
Management18
1.8 Knowledge Management in Projects 19
1.9 Public-Private Partnerships 26
1.10 Resources 30
2 Leading diversity (Human Relations and
Communications) 37
2.1 General Definition of Leading Diversity 37
2.2 Characteristics and Challenges of Multinational Projects 38
2.3 A Simple Framework for Investigating Team
Effectiveness 38
2.4 The Context of International HRM, Introduction
and Background to IHRM 39
2.5 The Cultural Context 40
2.6 Cross-Cultural Leadership Intelligence and
Communication42
viii • Contents
2.7 Leadership and Virtual Team 44

2.8 The Institutional Level 45
2.9 Global Labor Governance and Core Labor standards 46
2.10 Functions of HRM 47
2.11 Recruiting, Selecting, and Developing Talent 50
2.12 Staffing Internationally 54
2.13 Compensation and Rewards 55
2.14 Employee Relations 57
2.15 Resources 58
3 Project Integration Management 65
3.1 Definition of Project Integration Management 65
3.2 CPE Structure 66
3.3 CPE Project Charter and Alliance Agreements 67
3.4 Partnerships, Joint Ventures, and Strategic Alliances 67
3.5 CPE Project Charter 70
3.6 Lead Project Manager 72
3.7 Project Stakeholder Analysis and Systemic 74
3.8 Defining Project Goals and Objectives 76
3.9 Calculating the Total Project Budget 78
3.10 Governance and Ethics 80
3.11 Framework for Collaborative Project Planning 81
3.12 Disputes 83
3.13 Cultural Norms for the Project 85
3.14 Joint Project Planning Meetings 86
3.15 Resources 88
4 Scope Management 93
4.1 Definition of Scope Management 93
4.2 Developing a Project Scope 94
4.3 Organizational Breakdown Structure (OBS) 96
4.4 Value Chain WBS 100
4.5 Partner WBS 101
4.6 Scope Creep and Project Change Control 102
4.7 A Progress Measurement Framework 103
4.8 Cost and Currency Standards 105
4.9 Project Contingency 105
4.10 Accuracy of EAC 107
4.11 CPE Work Packages 111
4.12 Cost Updating and Change Control 112
4.13 Physical Progress 113
4.14 Risk Management 115
Contents • ix
4.15 Organizational Project Risk Plan 116

4.16 Project Risk Identification and Analysis 117
4.17 The Benefits and Risks of Partnering 119
4.18 Project Funding Risk 123
4.19 Resources 127
Conclusion 131
About the Author 133
Index 135
List of Figures
Figure 1.1. Characteristic of international projects (Koster 2010). 2

Figure 1.2. Sustainable performance and waste management. 4
Figure 1.3. Transmission channels of corruption on potential output. 7
Figure 1.4. Types of ethics. 8
Figure 1.5. Difference between law and ethics. 8
Figure 1.6. Margin figure sustainable competitive advantage
triangle.9
Figure 1.7. Conceptual framework of culture in IB research. 10
Figure 1.8. The 12 habits of highly collaborative organizations. 13
Figure 1.9. Criteria for evaluating integration success. 17
Figure 1.10. Global teams category and knowledge areas. 19
Figure 1.11. Global communication category and knowledge areas. 21
Figure 1.12. Global organizations category and knowledge areas. 22
Figure 1.13. Global tools and techniques categories and
knowledge areas. 24
Figure 1.14. The principal contractual relationships in a typical PPP. 27
Figure 1.15. An illustrative example of the cash flows received / paid
by a Private Entity for an Operational asset. 28
Figure 1.16. The example of the annual cash flows to equity
investors and the amortization profile of project debt
funding associated with a hypothetical PPP project. 29
Figure 2.1. Managing cultural diversity. 37
Figure 2.2. Influences to team performance. 39
Figure 2.3. Influence of research issues on transfer success. 39
Figure 2.4. Edward T. Hall theory. 40
Figure 2.5. Management approaches affected. 41
xii • List of Figures
Figure 2.6. The challenges of global leadership. 42

Figure 2.7. Virtual team research, adapted from Powell,
Piccoli, and Ives. 43
Figure 2.8. Managing international business operations in a
changing institutional context. 44
Figure 2.9. The impact of leadership in virtual teams. 45
Figure 2.10. Categories HR activities. 47
Figure 2.11. Overview of the four steps to strategic human
resources planning. 51
Figure 2.12. Overview of the talent development process. 53
Figure 2.13. Issues in employee selection staffing MNC’s staffing
orientation.55
Figure 2.14. Employing advocacy and business partnering. 56
Figure 2.15. Framework for applying the psychological contract to
the employment relationship. 58
Figure 3.1. Project integration management. 65
Figure 3.2. Monitoring and controlling the project work. 66
Figure 3.3. Implementing enterprise content management. 68
Figure 3.4. JV vs. strategic alliance companies. 69
Figure 3.5. The project charter and the statement of work. 70
Figure 3.6. Project organization chart. 73
Figure 3.7a. Team structures. 75
Figure 3.7b. Team structures. 75
Figure 3.8. Determining the budget. 77
Figure 3.9. Producing of simple cost graph by assuming that the
planned cost per day is linear. 78
Figure 3.10. Cost baselines. 79
Figure 3.11. Functions of project governance (the idea of the design
of major factors that influence leadership decision
making in o rganizations). 80
Figure 3.12. Working of CPE project management. 81
Figure 3.13. Mobilizing of teams and capabilities. 82
Figure 3.14. Disputes management process. 84
Figure 3.15. Rhetorical distance is situated in cultural system. 85
Figure 3.16. The meeting process and key facilitator responsibilities. 86
List of Figures • xiii
Figure 4.1. A project scope management. 93

Figure 4.2. pmp-scope management. 96
Figure 4.3. Organizational Breakdown Structure (OBS) 97
Figure 4.4. OBS and communications. 98
Figure 4.5. Using of WBS, RAM, and OBS together in project. 98
Figure 4.6. A project value chain. 99
Figure 4.7. Stakeholder groups. 101
Figure 4.8. Scope creep. 103
Figure 4.9. Progress measurement framework. 104
Figure 4.10. PMU’s structure. 104
Figure 4.11. Estimate uncertainty and risk exposure. 106
Figure 4.12. Components of total project cost, and contingency. 106
Figure 4.13. Performance factor in the EAC formula. 110
Figure 4.14. Project CPI performance. 111
Figure 4.15. Project CPI/SPI performance. 111
Figure 4.16. Framework of the CPM approach. 112
Figure 4.17. The steps of budgeting project. 114
Figure 4.18. Investor relations and risk management. 116
Figure 4.19. Implementation structure of risk management. 117
Figure 4.20. Risk process. 117
Figure 4.21. Risk management: Fundamental steps. 118
Figure 4.22. Monitoring and controlling. 120
Figure 4.23. Framework for evaluation of the benchmarked
supply chain collaborations. 121
Figure 4.24. Causal structure of the supply chain system for green
component supplier’s capacity planning and
procurement collaboration. 121
Figure 4.25. Multi-criteria decision analysis. 123
Figure 4.26. Framework for risk minimization intervention
evaluation study reporting criteria. 125
List of Table
Table 3.1. Facilitator core competencies (The International

Association of Facilitators 2001) 87
Introduction
When I was a child, I had lots of cars, trains, ships, and robot toys. I was
so interested in playing, taking apart and fixing them.
Besides this, while playing with my friends, I was the one who took
over the role of the story teller of the game who told the others the content
of the play and managed to give the others their role. When growing up,
I chose Physics, Mathematics, and Informatics as my major subjects at High
School where I became the best pupil at class, school, and local region.
Afterwards, I chose to study Engineering in the field of Computer
Hardware. The undergraduate program at Shahid Beheshti University
(SBU) is a well-rounded program. It did not only help me to build a solid
foundation of Computer Engineering fundamentals, but also helped me to
develop an overall perspective of the vast field of Engineering.
I have striven to perform well in all courses. My Bachelor thesis topic
was “Designing an Intelligent Systems for Marketing of Oil Products for
Iran Petrochemical Commercial Company,” and I was interested in Neural
Nets, Genetic Algorithms, Modelling and Simulation, and I was interested
in Industries and Energy so, I chose the numerical simulation of activity
around a transportation system, Management, as my final thesis. Addition-
ally, I was the coordinator of a team, which developed Mathematics and
Statistical Modelling for Robocop.
From 1996 until 2000, I was researcher at the School of Cognitive
Sciences and again from 2011 until 2013 and from 2016 until now, at the
School of Computer Sciences at IPM (Institute for Research in Fundamen-
tal Sciences), IPM is one of the most famous research institute in the field
of Fundamental Sciences of Iran. Here, I was involved in various different
projects, such as Designing a system for Virtual Banking, International
Market Intelligence for Marketing, Branding and Commercializing the
Hyper Performance Computing (HPC) and Spin-Offs.
As I pursued the Bachelor because of being busy with so many
projects, I found it would be best to combine my Engineering background
xviii • Introduction
with Management skills. Therefore, I chose to become an Industrial

Engineer with Major in Productivity and System Management.
Due to my studies, I became familiar with well-known people such
as Professor Michael Porter, Pierre Omidyar, Frederick Winslow Taylor,
Elvin Toffler, and Peter Drucker who had a great impact on me.
I got a scholarship from the Iranian Ministry of Interior and have
started my master in Socio-Economic Systems Engineering. My research
topic was about A Study of Tehran’s Potential Earthquake Effects on
Histo Eco Geo Socio Political factors with Security Approach and Giving
an Appropriate Strategic Planning Model. That time I was IT manager
and consultant for the Vice-Interior Minister in the field of logistics and
planning and could feel I need to have more skills in the field of Project
Management.
In Iran, the requirement for entering the field of Management as an
Engineer is to have at least three years of experience in Management of
Industrial and Administration units. I had six years of experience in Opti-
mization Management (OP) of logistics and transportation. During my
Master studies, I specialized in System Management, Strategy, Numeri-
cal Simulation, Modelling, HRM, Productivity Measurement, EFQM and
Optimization by passing related courses. My second Master thesis subject
was in energy sector A Study of Models for Productivity Measurement
and Selection of an appropriate model for Pars Oil and Gas Company
(P.O.G.C). That time I was working for one of the most famous and big-
gest Gas and Oil companies of Iran and worldwide: Pars Oil and Gas
Company (P.O.G.C.), which coordinates a big percentage of the entire
world gas resources. My position at P.O.G.C. was Manager of Logistics
and Procurement of all Plans, Phases and Projects and Executive Adviser
of the CEO. During my time at P.O.G.C. I optimized the plan for sea
transportation, shipping, maritime and helicopter transport via real time
service and maintenance of these logistics at the Persian Gulf and the mis-
sion areas, which also was a great experience as a logistics project man-
ager with value engineering approach on international level during the
sanctions against Iran.
From 2008 until 2012, I was consultant at the Ministry of Industry,
Mine and Trade with several project duties in the field of status quo in
green industrial parks and cities, industrial waste management, green
technology, and green business with IT approach.
Besides many articles, since 2008 I have published more than 17
scientific books and many articles in Iran.
From 2009 to 2012 I was awarded a doctorate in Business Strategy.
During the time of my education in Iran, I have participated in some energy
projects such as fossil, solar, wind, and biomass projects. For instance,
Introduction • xix
I cooperated in fixing and reoperation of the NRI solar concentrated Stir-

ling dish. In another project, I was responsible for performing the devel-
opment activities of the project of biogas extraction from Shiraz landfill
in Iran.
After that, my interest to work on an international level has grown.
Therefore, I decided to move to Denmark in summer 2012. Ever since,
I have collected various practical experiences in different Danish compa-
nies that are working on international projects like Sustainable Platforms.
Nowadays, I still have partner projects running with Danish companies,
especially, one company (Sustainable Platforms) in renewable energy,
waste and wastewater management.
In September 2015, I moved to Germany where I have started my
career at University of Applied Sciences-Fachhochschule des Mittelstands
(FHM) as a lecturer and researcher. Presently, in August 2018, I have
received the PROFESSOR title in the field of International Management.
Besides this, in January 2016 I founded my own International Bridg-
ing Businesses Management Company named “DOOST INTERNA-
TIONAL.” During May and June 2016, I was entrusted representative of
the German Federal State Mecklenburg-Vorpommern as a consultant of
the Minister of Energy, Infrastructure and State Development, for their
delegation visit in Iran. Since 2016, I am an International Business Devel-
oper and Consultant for various Danish, Iranian and German companies in
the field of renewable (green) energy, waste and waste water management,
sustainability, wind turbine and water desalination plants.
Since December 2016 I have started my project about Sustainable
Management with a Danish company in Copenhagen where I have intro-
duced Sustainable Platforms about renewable energy, waste and wastewa-
ter management.
Furthermore, since April 2017, I am an external professor at TU
Berlin for the Master program in Sustainability Building and Energy
Management.
Finally since 1st of August 2017 I have started a research develop-
ing Erasmus + project called Internet of Energy/Education-Qualification
(IoE/E-Q) at University of Applied Sciences-FHM as an academic project
leader. Furthermore, I have been included in the International Program
Committee for the international Internet of Thing (IoT) conference in
Santa Cruz, Canary Islands, and Spain in April 2018 and international
EDUCON2019—IEEE Global Engineering Education conference in
American University in Dubai, Dubai, UAE April, 2019.
Besides this, I am external examiner and supervisor for PhD/DBA
participants at two English state Universities (Worcester University and
University of Gloucestershire).
xx • Introduction
On a self-employed base, I was consultant for the Minister of Energy

and Infrastructure in Mecklenburg federal state of Germany and presently
for some Danish and German companies.
Also, at the moment I am board member and vice-CEO of the NICC
(Norwegian Iranian Chamber of Commerce).
As a Director for International Management, Iran Representative and
Consultant of CEO at University of Applied Sciences-FHM, on August
21–23, I was Conference Manager for the International Conference in
“Future of SMEs for Iran and Germany” in Berlin and that was a success-
ful international project for me.
Having published several books in Persian language, before, how-
ever, this is my third book in English language named International
Project Management: A Focus on Value Engineering and HR Approach
in Multinational Corporations-Volume 1 and shall open the doors to an
international, sustainable (business) world.
At the end, I would like to say special thanks to my first boss
Dr. Gholamhossein Bolandian because of his motivation and guidance
and my current colleagues and boss, Prof. Dr. Habil Richard Merk and
Prof. Dr. Volker Wittberg because of their strong motivation and my PhD
student Ms. Leyla Hakami who helped me so much in this project.
Prof. Dr. Hamid Doost Mohammadian

January 2019, Berlin, Germany
CHAPTER 1
International Project
Management
1.1 Definition of International Project

Management
Globalization has brought us a more integrated and interdependent world

economy and therefore is creating an increasing number of international
projects, that is, projects that reach beyond national boundaries regarding
either the project purpose or the nationality of the stakeholders. However,
surveys show only a 40 percent success rate of international effort.
One would think that standard project management methods can be
applied within those projects as it is quite successful on a national scale.
But international projects bring many different issues that are not cov-
ered by standard methods. One of the most difficult challenges, compa-
nies have to undergo is cultural differences. People do not have the same
perception of power, happiness, time line, or team works and it can have a
huge impact on the success of a project. To help the manager identify those
differences, a list of questions have been developed within the Hofstede
6-D method which manages to give a broad idea of the challenges cultural
differences could bring. Furthermost, to identify and mitigate all the new
issues created by international projects, international project management
requires unique methods, tools, and techniques.
International project management emphasizes the main differences
between international projects and standard projects. A method to identify
all the challenges that ensues from international projects will be devel-
oped as, depending of the project, you can have quite different issues.
Finally, the key success factors in international project management will
be exposed.
2 • International Project Management
– Wide range of objectives

– Organizations with crossborder activities, international – Comprehensive scope
– Different national network of organizations, international joint ventures, etc. – Heterogeneous
cultures – Context: all countries in the world with their historical, stakeholders with
– Different organizational political, economic, technological, environmental, and conflicting interests
cultures legal differences – High number of
– Different functional interactions
cultures – Huge number of
– Different languages enviromental risks
– Different educational – High uncertainty due to
backgrounds Uniquencess unpredictatic global
– Different time zones environment and
– Different currencies novelty of project
– Different jurisdictions – Many internal risks due
to complexity
Diversity Risk
– High speed and time – Heterogeneous

pressure due to fast stakeholders
Dynamics International Complexity
developments in global – Numerous
markets
project
(sub) organizations with
– Sudden changes due to
self-interests and sub-
fierce competition in
global markets cultures
– High degree of virtuality
– Frequent changes due to Limited resources
involvement of numerous – Multi-disciplinarity
parties – Huge amount of
– Sudden changes due to information that needs
unforeseen to be processed
risks/opportunities resulting in complexity
– Continuous coordination – Additional cost due to transportation and coordination by volume and variety
and alignment necessary – Additonal time for planning due to greater complexity – Technical complexity
due to high due to innovativeness
interdependence of – Scarce human resources due to greater skills
requirements and bigger scope (e.g. foreign languages, and comprehensive
different stakeholders
intercultural skills) scope
Figure 1.1. Characteristic of international projects (Koster 2010).

Source: https://researchgate.net/figure/Characteristics-of-international-proj-
ects-Koster-2010_fig1_273112437
1.2 Understanding the Issues

Standards in International and
Globalization Environment
Globalization is the tendency of firms to extend their sales or manufac-

turing to new markets abroad. For businesses everywhere, the rate of glo-
balization in the past few years has been nothing short of phenomenal.
Globalization of markets and manufacturing is important, in part because
it has vastly increased international competition.
Throughout the world, firms that formerly competed only with
local firms—from airlines to car makers to banks-have discovered
they must now face an onslaught of new foreign competitors. Porous
international boundaries and trans-border flows of capital have pre-
cipitated a relentless proliferation of multicultural projects (Ghoshal
1987). Globalization has impacted project management profoundly,
International Project Management • 3
and has only reinforced the trend toward adoption of the project mode
of work organization. G lobalization in project management means
among other matters more projects executed in the multi-cultural
environment. E ast-West culture mix is an example of such a situation,
requiring from the stakeholders quite a different approach. The spec-
tacular globalization of firms in the course of the past decade has been
a key challenge for p ractitioners and researchers alike (Bhide 2000).
Strategy researchers have attempted to pin down the various alterna-
tives for firms to gain competitive advantages in international markets
(Ghoshal 1987). They have also considered the challenge of managing
across borders and implementing a global strategic management pro-
cess. Forming m ulticultural teams has been one of the organizational
responses taken by multinational corporations (MNCs) (Bartlett and
Ghoshal 1989, 1992).
1.3 Sustainability and the Issue

Standards in International and
Globalization Environment
The United Nations Global Compact (www.Unglobalcompact.org)

asks companies to embrace, support, and enact, within their sphere of
influence, a set of core values in the areas of human rights, labor stan-
dards, the environment, and anti-corruption. More than 5,000 global
companies in 130 countries take part in the initiative, which is made
up of 10 principles:
1. Human Rights
1. Business should support and respect the protection of interna-
tionally proclaimed human rights; and
2. Make sure that they are not complicit in human rights
abuses.
2. Labor
1. Business should uphold the freedom of association and the effec-
tive recognition of the right to collective b argaining;
2. The elimination of all forms of forced and compulsory labor;
3. The effective abolition of child labor; and
4. The elimination of discrimination in respect of employment and
occupation.
Economic
dimension
Economics
Environment Infrastructure
Waste Proliferation
management resistance
Environment Social
Safety
dimension dimension
Figure 1.2. Sustainable performance and waste management.

Source: https://mdpi.com/2071-1050/9/9/1623
3. Environment
1. Business should support a precautionary approach to environmen-
tal challenges;
2. Undertake initiatives to promote greater environmental responsi-
bility; and
3. Encourage the development and diffusion of environmentally
friendly technologies.
4. Anti-corruption
Business should work against corruption in all its forms, including
extortion and bribery.
CSR is, at this point, a self-regulated business policy that commits

the organization to follows laws and international standards of ethics
and norms. Normally it is concerned with stakeholders (profitabil-
ity), society (social consciousness), employees (equal o pportunity),
and the environment. TBL, like CSR, commits the organization to

focus on stakeholders, the environment, and society. Organizations
that strive to meet a TBL or CSR goal recognize a responsibility to
make money, to protect the e nvironment, and to be good citizens. At
RMIT University in M elbourne, Australia, the need for corporate gov-
ernance, the care and nurturing of the workforce and transparency,
was added to produce the TBL+1. Some organizations have adopted
sustainability or CSR guidelines, but, unfortunately, many have not.
On international projects, it has been our experience that there is a
mixture of organizational policies, attitudes, and values on this sub-
ject. The international project manager of each o rganization that par-
ticipates is responsible for knowing the standards that apply for her or
his organization. The challenge then is for the lead project manager
to negotiate, and establish, a set of standards that apply for the entire
project team.
Doing this may feel much like the dilemma of negotiating peace in
the Middle East, where feelings run deep and a keen knowledge of the
history is essential. The lead project manager cannot dictate the poli-
cies that each organization will follow but rather must set a standard that
each organization can understand. Each organization, and person, can
then choose to attempt to reach the project standard. That is their choice,
and while it is not encouraged, it should be a choice that the lead project
manager respects.
1.3.1 Laws and Regulations
In simple terms, the law may be understood as the systematic set of uni-
versally accepted rules and regulation created by an appropriate authority
such as government, which may be regional, national, international, and
so on. It is used to govern the action and behavior of the members and can
be enforced, by imposing penalties.
Many times the term law is juxtaposed with the term ethics, but
there is a difference, as ethics are the principles that guide a person
or society, created to decide what is good or bad, right or wrong, in
a given situation. It regulates a person’s behavior or conduct and
helps an individual in living a good life, by applying the moral rules
and guidelines.
1.3.2 Comparison Chart

Basis for
Law Ethics
Comparison
The law refers to a system-
Ethics is a branch of
atic body of rules that gov-
moral philosophy that
Meaning erns the whole society and
guides people about the
the actions of its individual
basic human conduct
members
What is it? Set of rules and regulations Set of guidelines
Individual, Legal, and
Governed By Government
Professional norms
Expressed and published in
Expression They are abstract
writing
Violation of law is not per-
missible which may result in There is no punishment
Violation
punishment like imprison- for violation of ethics
ment or fine or both
Law is created with an intent
Ethics are made to help
to maintain social order and
people to decide what is
Objective peace in the society and
right or wrong and how
provide protection to all the
to act
citizens
Ethics do not have a
Binding Law has a legal binding
binding nature
1.3.3 Definition of Law
The law is described as the set of rules and regulations, created by the
government to govern the whole society. The law is universally accepted,
recognized, and enforced. It is created with the purpose of maintaining
social order, peace, justice in the society and to provide protection to the
general public and safeguard their interest. It is made after considering
ethical principles and moral values.
The law is made by the judicial system of the country. Every person
in the country is bound to follow the law. It clearly defines what a person
must or must not do. So, in the case of the breach of law may result in the
punishment or penalty or sometimes both.
1.3.4 Definition of Ethics
By ethics, we mean that branch of moral philosophy that guides people

about what is good or bad. It is a collection of fundamental concepts and
Corruption
• Lower domestic business

investment
• Lower productivity
• Lower FDI inflows

• Lower productivity
• Less circulation of international know-
how
• Reduced competition
• Lower quality
• Higher prices
• Less innovation
• Reduced entrepreneurship
• Fewer start-ups
• Less innovation
• Diversion of talent to less productive
activities
• Composition of government
expenditure
• Lower spending on education
• Poor quality of public investment
Potential output
Figure 1.3. Transmission channels of corruption on potential output.

Source: https://weforum.org/agenda/2015/05/why-fighting-corruption-in-italy-
matters-for-economic-growth/
principles of an ideal human character. The principles help us in making

decisions regarding, what is right or wrong. It informs us about how to
act in a particular situation and make a judgment to make better choices
for ourselves.
Ethics are the code of conduct agreed and adopted by the people. It
sets a standard of how a person should live and interact with other people.
1.3.5 Key Differences Between Law and Ethics
The major differences between law and ethics are mentioned below:
1. The law is defined as the systematic body of rules that governs the
whole society and the actions of its individual members. Ethics
means the science of a standard human conduct.
2. The law consists of a set of rules and regulations, whereas e thics
comprises of guidelines and principles that inform people about
how to live or how to behave in a particular situation.
Ethics
Normative Personal Social ethics Professional

ethics ethics ethics
Figure 1.4. Types of ethics.

Source: https://keydifferences.com/difference-between-law-and-ethics.html
Law Vs Ethics
Figure 1.5. Difference between law and ethics.

Source https://keydifferences.com/difference-
between-law-and-ethics.html
3. The law is created by the government, which may be local, regional,

national, or international. On the other hand, ethics are governed
by an individual, legal, or professional norms, that is, workplace
ethics, environmental ethics, and so on.
4. The law is expressed in the constitution in a written form. As
opposed to ethics, it cannot be found in writing form.
5. The breach of law may result in punishment or penalty, or both
which is not in the case of breach of ethics.
6. The objective of the law is to maintain social order and peace within
the nation and protection to all the citizens. Unlike, ethics that are
the code of conduct that helps a person to decide what is right or
wrong and how to act.
7. The law creates a legal binding, but ethics has no such binding on
the people.
1.4 Competition and Value Chains
1.4.1 Value Chain and Competitive Advantage
Value chain describes activities within and around an organization and

relates them to an analysis of the competitive strength of an organization.
To achieve a competitive advantage, the firm must perform one or more

value creating activities in a way that creates more overall value than do
competitors. Superior value is created through lower costs or superior
benefits to the consumer (differentiation). In order to (Figure 1.6. P
orter’s
Value Chain) better understand the activities leading to competitive advan-
tage, one can begin with the generic value chain and then identify the
relevant firm-specific activities. Process flows can be mapped, and these
flows used to isolate the individual value creating activities (Pearce and
Robinson 2005).
Value chain analysis is a powerful managerial tool for identifying
which activities have competitive advantage potential. A firm’s
competitive edge is based on its ability to perform competitively using
crucial activities along with its value chain to achieve better results
than its rivals. Once the discrete activities are defined, linkages between
activities should be identified. A linkage exists if the performance or
cost of one activity affects that of another. Competitive advantage
may be obtained by optimizing and coordinating linked activities
(Hamel 1990).
The value chain also is useful in outsourcing decisions. Under-
standing the linkages between activities can lead to more optimal
make-or-buy decisions that can result in either a cost advantage or a dif-
ferentiation advantage. A firm’s value chain links to the value chains of
upstream s uppliers and downstream buyers. The result is a larger stream
of activities known as the value system. The development of a compet-
itive advantage depends not only on the firm-specific value chain, but
Firm infrastructure
Infrastructure
SECONDARY
ACTIVITIES
Interrelations
Human resource management
M
A
Technological
RG
Technology development
IN
interrelations
Procurement Procurement
Interrelations
Inbound Outbound Marketing

Operations Service
IN
logistics logistics and sales

RG
A
M

Product interrelations Market interrelations
Figure 1.6. Margin figure sustainable competitive advantage triangle.

Source: https://researchgate.net/profile/Farai_Chigora/publication/30163
5105/figure/fig2/AS:355020508811265@1461654893782/Classi-
cal-Value-Chain-Model-Competitive-Advantage-Creating-Sustain-
able-Performance.png
also on the value system of which two the firm is a part. Value chain is a
tool for diagnosing competitive advantage and finding ways to enhance
it (Porter 1985).
1.5 Multiple Cultures with Human

Resource Approach
1.5.1 Implications of Hofstede’s Study on
International Human Resource Practices
In multinational firms, there are occasions that call for new policies. Some
of such policies involve risk to which the business must decide whether to
continue with such a venture or opt out. Where the directors or the strate-
gists are of a low uncertainty avoidance orientation, they are likely to go in
for the deal though risky. On the other hand, those with a high uncertainty
avoidance orientation would want to avoid any possible loss and so may
not attempt the deal at all.
Taking leaders into consideration, those from high power distance
cultures may tend to be very authoritative, and this may lead to problems,
especially when such leaders are dealing with subordinates from low power
distance cultures who expect leaders to come to the same level as their sub-
ordinates. Group or team work is one of the key activities undertaken in
many businesses. In the situation where individuals from both individualist
and collectivist cultures are brought together to work as a team, challenges
are likely to be faced because of the way each side would approach the
issues at hand. For instance, while those from the individualistic culture
Hofstede’s
#2.1 Foreign (1980) #1.1 Concepts
Entry modes cultural and validation
taxonomy
#2.2 Transaction #1.2 Institutional

costs approach theory
Cultural distance Cultural dimensions
Figure 1.7. Conceptual framework of culture in IB research.

Source: https://researchgate.net/figure/Conceptual-Frame-
work-of-Culture-in-IB-Research-Why-does-Hofstede-s-
work-stand-out_fig3_274360774
may want to have their views implemented regardless of the views of others,
those from the collectivist culture would want collaboration and mutuality.
Again when it comes to working out the long-term objectives of
the organization, views as to what should be the main focus may dif-
fer, depending on whether the individual is of a masculine or feminine-
centered culture or orientation. Thus while the feminine culture will focus
on holistic aspects, the masculine culture will emphasize success, achieve-
ment, social status, and quantifiable realities. Businesses in the global
environment have no option but to be dynamic (change) if they are to
be relevant to the fast moving times particularly in the business world. It
therefore suggests that at a point the way businesses do things might have
to change. The level of acceptance of this new change depends on the
orientation of the people within the organization. In this case, those of the
long-term orientation would be willing to adapt to new situations while
those of the short-term orientation would want to maintain the existing
culture and so would resist any change efforts.
The above issues raised point to the fact that in any situation that
involves the human resource, such as decision making, responding to
change, leadership, team work and risk taking, issues of culture may arise,
especially in multinational businesses that are made up of individuals from
different countries, thus different cultural orientations. With the human
resource viewed as the most important asset of businesses with which suc-
cess can be attained (Armstrong 2006), the issues of culture that directly
relates to the people must not be neglected. It must be emphasized that
in the event of cultural diversities, success can only be attained through
effective management of the cultural issues.
1.5.2 The Effect of International Culture on

the Association Between Profitability
and Corporate Social and Environmental
Disclosure
Three approaches critical to the success of multinational companies

in the handling of cultural issues in organizations tackling the cultural
challenges:
• “Hybridization of culture” where aspects of the culture of dom-

inant nationals are interwoven into a common culture of the
organization
• “Culture adoption” an organizational culture strategy that involves
the adoption of the culture of one of the parties involved
• “Creation of a new culture” to addressing and handling the chal-

lenges that cultural issues posed to organizations
1.6 International Project
Organizational Structures
Collaborative Project Enterprise
To avoid or at least to minimize the number of potential conflicts related to

project work, enterprises have established different types of organizations.
The best known types are functional, matrix, and project-based organiza-
tions. Each of them establishes different relations between project stake-
holders, especially between project and line managers.
A definition of the different types of project organizational structures
can be found in almost every project management book published in the
last 30 years. In this paragraph, I will briefly summarize some defini-
tions. Since it is strongly connected with the project organizational cul-
ture, the formal and informal role of line/functional managers in a matrix
organization is particularly important. Therefore, this issue is described in
more detail.
The functional organization is the classical organization and con-
sists of purchasing, HRM, production, sales, finance department, and so
on. If a company starts such a project, this structure is unsuitable unless
some changes are introduced. Employees from different departments are
required to undertake additional project tasks, while the project’s man-
agement is assigned to a person within the functional organization. All
project activities, including management, represent additional tasks. The
advantage of this solution is that nothing changes within the existing
organizational structure by the introduction of such projects. The main
disadvantage is that team members always give priority to their usual or
functional duties. We can argue that this solution is appropriate in the case
of starting a few projects.
In the case of a project-based organization, the project is assigned to a
group of employees who are organized within a new department. Members
of the project team only work on project tasks; thus, being occupied with
other regular activities is no excuse. The project manager, with the same
authority as line managers, is responsible solely for the project and there
is no need for cooperation with line managers. Strong team work exists in
the department. The main disadvantages are team members who are not
fully occupied, the reduced connection of team members with the business
functions, and the problem of employment after the project finishes.
–1–
Individual –3–
benefit is just as Listen to the
important as the voice of the
overall corporate employee
benefit (if not
more so)
–2–
Strategy
before
technology
–12– –4–
Collaboration Learn to
can make the get out of
world a better the way
place
–11–
Employee –5–
collaboration Lead by
also benefits example
the customer
–6–
–10– Integrate
Adapt and into the flow
evolve of work
–8–
Measure
what
matters
–7–
–9– Create a
Persistence supportive
environment
Figure 1.8. The 12 habits of highly collaborative organizations.

Source: https://forbes.com/sites/jacobmorgan/2013/07/30/the-12-habits-of-
highly-collaborative-organizations/#7b1e4bde3683
The project matrix structure is a combination of the above-men-

tioned structures. Every employee can carry out their regular activities
within the business function and, at the same time, be assigned to the
project to conduct some unique project activities. The member is thus
subordinated to the line manager (for their regular work) and to the proj-
ect manager. The matrix structure is characterized by the simultaneous
presence of both project and functional components. These components
are administratively independent, but interdependent in the execution of
projects. This arrangement permits functional components to maintain an
independent existence and to pursue their regular activities, while provid-
ing the specialized resources needed for the execution of projects.
In general, the specialists remain permanently under the authority of

the line managers, but their services are lent out to the projects on a tem-
porary basis in line with project needs. The functional components thus
become centralized reservoirs of specialized resources. The advantages of
a matrix organization include the more direct contact among different dis-
ciplines, the fact that people can work on a variety of problems, a strong
technical base can be developed, and much more time can be devoted to
complex problem-solving, and shared authority and responsibility.
Yet, it has also some weaknesses: a two-boss syndrome and dual
reporting, requirement of management co-operation, the balance of power
between the functional and project organization, and a conflict of priorities
amongst different projects (Dinsmore 1993; Forsberg et al. 2005; Kerzner
2003). The project manager has total responsibility and accountability for
the project’s success. The functional departments, on the other hand, have
the functional responsibility to maintain technical excellence in the proj-
ect. Each functional unit is headed by a line manager whose prime respon-
sibility is to ensure that a unified technical base is maintained and that all
available information can be exchanged for each project. Line managers
must also keep their people aware of the latest technical developments in
the industry (Kerzner 2003). Three types of the matrix organization are
applied in practice.
A weak matrix has many characteristics of a functional organization
with one important difference—a project coordinator is defined. One has
little authority (coordinates different departments), but also fewer respon-
sibilities—line managers are responsible for task execution and the moti-
vation of employees. A strong matrix has many of the characteristics of the
project-based organization and can have full-time project managers with
considerable authority and full-time project administrative staff. While a
balanced matrix organization recognizes the need for a project manager, it
does not provide the project manager with full authority over the project
(PMBOK 2004).
1.6.1 The Integration of Project Management

and Organizational Change Management
When an organization introduces a change with a project or initiative, that

change needs to be effectively managed on both the technical side and
the people side. A technical side focus ensures that the change is devel-
oped, designed, and delivered effectively. The discipline of project man-
agement provides the structure, processes, and tools to make this happen.
A people side focus ensures that the change is embraced, adopted, and uti-
lized by the employees who have to do their jobs differently as a result of
the project. The discipline of change management provides the structure,
processes, and tools to make this happen.
Project management and change management both aim to increase
the likelihood that projects or initiatives deliver the intended results and
outcomes. Although each discipline can function independently, the most
effective approach is to integrate change management and project man-
agement to create a unified approach to implementing change on both
fronts. Here, Prosci provides an overview of integrating change manage-
ment and project management, including recent data on the effectiveness
of integration.
1.6.2 Integration Value
Integrating change management and project management creates value on

a given project or initiative for a number of reasons:
1.6.2.1 Shared Objective
When project management and change management are integrated, the

efforts of both can be focused toward a singular objective—improving the
performance of the organization by successfully implementing a change
that delivers the intended results and outcomes.
1.6.2.2 Proactive Steps
When change management is integrated into the project management

steps, the efforts to manage the people side of change can identify and
mitigate risks in a more proactive manner, address anticipated obstacles
and resistance, and build commitment and buy-in for the change.
1.6.2.3 Sequencing and Alignment
When technical activities and people activities are integrated, the right
steps can be taken at the right time in the project life cycle to help
employees embrace the change and produce the right outcomes for
the project.
1.6.2.4 Exchange of Information
Integrating change management and project management activi-

ties improves the flow of information. On the front end, the integrated
approach helps ensure that impacted employees are receiving the appro-
priate messages. On the back end, it helps ensure that the project team
receives effective feedback on adoption, usage, and reaction to the change.
1.6.3 Dimensions of Integration
Integrating change management and project management can take place

across numerous dimensions. Four common dimensions of integration are:
1.6.3.1 People Dimension
Architecting the relationship between the project team and the resource
or resources dedicated to change management—integrating at the “who
is doing the work” level. In the simplest terms, the change management
resources either sit on the project team or sit outside of, but in support of,
the team.
1.6.3.2 Process Dimension
Sequencing and aligning the technical side activities with people side
activities—integrating at the “what work is being done” level. The process
dimension has a key role in determining when change management begins
during the project life cycle.
1.6.3.3 Tool Dimension
Identifying particular tools that can be extended to include both a techni-

cal side and people side component integrating at the “what tools are being
used to do the work” level. Risk assessments and communications plans
are two common tools that can be effectively integrated.
1.6.3.4 Methodology Dimension
Creating a common set of steps applied by any project that addresses both
the technical side and the people side of the change. There is value to an
Criteria for evaluating integration success
Change capability Risk management

How strong was management grip? How How much attention was given to critical areas of
competently did management grasp key business performance? How effectively were the
performance issues? particularly weak functions or activities managed?
y
ilit
Ris
What prior change experience was How was the management of perceptions
ab
km
drawn on? To what extent had and expectations handled? How well were
cap
the organisation acquired,
an
the expectations of internal and external
age
learned from and applied pre-
ge
audiences managed?
me
an
vious experience of major
How was the management of peo-
nt
change? Ch
ple issues handled? What action
was taken to minimise the nega-
tive morale effects of the deal?
Benefits realisation
Benefits realisation
How effectively were project management
processes applied?
How good were the performance measures
and systems for tracking performance
through the process?
Figure 1.9. Criteria for evaluating integration success.

Source: https://imaa-institute.org/achieving-post-merger-integration
integrated project delivery approach that addresses both the technical and
people elements, but hard wiring a “one-size-fits-all” methodology also
has potential risks.
1.6.4 Data on Integration
With the value of integrating change management and project manage-

ment and the dimensions of integration established, the question remains:
what impact does integrating these two disciplines have on meeting a proj-
ect’s objectives? In Prosci’s Best Practices in Change Management-2016
Edition, 58 percent of the participants who integrated change management
and project management in their project met or exceeded their project
objectives.
1.6.5 Prerequisites to Effective Integration
Even when change management and project management are both applied
on a change, they may not necessarily be integrated. Several important
prerequisites must be in place for change management and project man-
agement integration to occur. These prerequisites include:
1.6.5.1 Focus on Results and Outcomes
The project team must be focused on, responsible for and held accountable
for delivering results and outcomes for meaningful integration to occur.
If the project team is only held accountable for “flipping the switch”
or hitting a go-live date, then integration is difficult. Likewise, change
management resources must define their own success in terms of the
achievement of project results and outcomes, not simply executing change
management activities (such as number of communications delivered or
number of employees trained). This shared focus on results and outcomes
is the cornerstone of successfully integrating the technical side and the
people side of change.
1.6.5.2 Recognition of the Role and Value of Change

Management
Before integration can occur, there needs to be an acknowledgment of

the role and value of change management. Change management must be
valued and viewed as a crucial component of project delivery. As a change
management practitioner, this means making a case for change manage-
ment that directly connects to the success of the project or initiative. While
there are a number of approaches for making this connection, applying
change management must be shown to have a direct impact on realizing
benefits and achieving the desired results and outcomes.
1.7 Structured and Rigorous Approach

to Change Management
Project management brings a structured process and set of deliverables

to the technical side of change. Change management should also bring
a structured process and set of deliverables to the people side of change.
Without structure and rigor, it is difficult to integrate change manage-
ment activities into a project delivery approach. Additionally, a structured
and rigorous approach to managing the people side of change increases
the credibility and accessibility with sponsors, project managers, and
project teams.
Success for a project or initiative results from an effectively designed,
developed, and delivered solution that is embraced, adopted, and utilized
by impacted employees. Project management and change management are
complementary disciplines with a common objective. When integrated in
the delivery of a project or initiative, project management and change
management together provide a unified approach for achieving the desired

results and outcomes of organizational change.
1.8 Knowledge Management in Projects
Many organizations struggle to reach the required levels of quality and

effectiveness from global projects because their methods, tools, and prac-
tices are not adapted to a global multicultural environment, where most
communication is asynchronous and involves different cultures and
languages. To resolve these issues, a novel framework was proposed in
Global Project Management: Communication, Collaboration and Man-
agement Across Borders (Binder 2007), recognized by PMI as the best
project management literature of 2007 with the PMI David I. Cleland
Project Management Literature Award.
The project management profession already has a solid foundation for
processes, tools, and methods. The bodies of knowledge already reached a
very good level of maturity, and most companies adopted to some extent
the principles from the PMBOK® Guide, PRINCE2, or IPMA. Many
project managers already possess some type of formal certification in the
field. Certified project managers are the ones who master the techniques
required to successfully manage the project within constraints such as
cost, scope, quality, and time.
Global project managers must have good strategies to coordinate
multicultural and virtual teams, by understanding and taking into consid-
eration the differences in culture, language skills, and time zones. A good
starting point is to have a solid understanding on the cultural dimensions
and different leadership theories. Using this knowledge, a trusted relation-
ship can be developed with different stakeholders, and coaching can be a
valuable tool. Finally, conflicting situations are inevitable: in many situa-
tions, they can bring innovation. A good project manager must be ready to
resolve them and build from the differences.
Global 1 2 3 4 5
teams Cross- Global Trust Conflict Coaching
cultural team building resolution
collaboration leadership
Figure 1.10. Global teams category and knowledge areas.

Source: https://pmi.org/learning/library/global-project-management-
framework-6863
• Cross-cultural collaboration—Fons Trompenaars says that culture

is like water to a fish. Geert Hofstede adds that culture has visible and
invisible elements. These two authors defined different dimensions
to the cultural differences, which allow the understanding of diverse
standpoints—potential sources of innovation and conflict. Using
the dimensions, global project managers can recognize the invis-
ible elements of the national cultures present in the project team,
accepting the different mindsets and respecting them, and assigning
people to the roles and activities that fit their communication style.
The dimensions can also be a rich source for risk identification and
mitigation, when evaluated in early project stages.
• Global team leadership—Global leaders must adapt their lead-
ership, communication, and management styles to the different
cultures they work with. They must develop an understanding of
how to obtain commitment and improve the motivation level of the
project team members when having most of the meetings over a
distance and outside office hours.
• Trust building—Some communication channels (between team
members) are more likely to require a high level of trust when they
cross country borders or involve people who have never worked
together before. Project managers must identify the weak commu-
nication channels and work to resolve this, beginning with project
initiation, in order to build trust. The project planning phase is often
a very good opportunity to bring the team together (or around a vir-
tual table, over web or video-conferencing) and build trusted rela-
tionships, which must last until the project completion and which
form solid links for future ventures.
• Conflict resolution—Project managers must pay special attention
to the potential sources of conflict that are specific to global proj-
ects, identifying different techniques to act as a mediator, assess the
situation, and resolve the conflict in the best interests of the project
objectives.
• Coaching—Project managers can use coaching as a powerful tool
to develop trust and learn about the cultural differences. A good
coaching process starts with a clear definition of goals, contin-
ues with a periodic review of the achievements, and stops with a
structured review of the learning and next steps.
1.8.1 Global Communication
Project managers spend most of their time communicating. Collecting

information from team members, compiling project status and reports,
6 7 8 9 10
Rules Global
Global Stakeholders Global
communication
Global
communication and and communication creativity
communication templates strategy techniques
channels
Figure 1.11. Global communication category and knowledge areas.

Source: https://pmi.org/learning/library/global-project-management-frame-
work-6863
distributing essential information to key stakeholders, all are part of the

daily tasks in any project. Global projects bring the challenges of distance
and skewed time zones, requiring different techniques to excel in the same
daily tasks. Add to these the multi-language and cross-cultural barriers to
understanding, and the communication activities are far from being sim-
ple. Global project managers must involve their team members to identify
the stakeholders and understand the communication channels between the
team members. With this in mind, a good communication strategy must
be defined, together with techniques, rules, and templates to communicate
and brainstorm effectively over distance.
• Stakeholders and communication channels—The identification,

analysis, and management of global stakeholders involves the team
members, who are best placed to understand and influence the
stakeholders in their geographical area. The project managers must
lead this task, and provide coaching and support for this process
to be effective. On the other hand, the communication channels
that span geographical and cultural borders must be identified and
receive special attention.
• Rules and templates—Global project teams must together define
the basic rules to select the best communication media for each
meeting type. They must also agree upfront on the templates to be
deployed throughout the project, keeping in mind that the docu-
ments will be prepared and reviewed using synchronous and asyn-
chronous electronic media.
• Global communication strategy—The main members of the
global project team must define the most frequent types of proj-
ect information, and identify the stakeholders’ requirements.
A good communication strategy for a global project specifies the
relationship between each key stakeholder and the main informa-
tion types, defining the best media and manner for the communica-
tion to take place.
• Global communication techniques—Global project manag-
ers and project office members must master the techniques to
c ollecting information from geographically distributed team mem-

bers, exchanging project information with the main team members,
and distributing the project status and reports to key stakeholders.
• Global creativity—The uniqueness of project deliverables requires
the global team members to unite their creative minds. Brainstorm-
ing sessions are widely used around whiteboards and flip charts.
Global project managers must use a different set of tools and tech-
niques to foster creative ideas and capture fuzzy knowledge in
online meetings.
1.8.2 Global Organizations
When organizations start coalitions, programs, or projects that span coun-

try borders, they must think about the impact on their organizational cul-
tures and structures. The program and project structures must be carefully
designed in order to respect the geographical dispersion of the human
resources while allowing the optimal communication between the team
members. Global program offices (PMO) have a key role in interviewing
the international experts and providing coaching and organizational sup-
port to the global program and project managers (Exhibit 12).
• Global project structures—International projects can be struc-

tured in different ways: project managers communicate directly to
all key team members in centralized structures. In distributed struc-
tures, project coordinators are nominated to monitor the planning
and execution of a group of team members in the same geographi-
cal location, organization, or knowledge area.
• Selection of international human resources—Project managers
and team members must have specific skills to work effectively in
global projects. Global thinking, culture awareness, self-motiva-
tion, and openness are examples of skills that can be required from
candidates during the selection process or developed with training
programs. Special skills also help to conduct interviews over a
11 12 13 14 15
Global Global Selection of Global Organisational Global
project international program and support collaborative
organisations structures human project networks
resources offices
Figure 1.12. Global organizations category and knowledge areas.

work-6863
d istance, and good preparation of questions and the communication

media are key factors for a successful selection process.
• Global PMOs—Program or project management offices can pro-
vide various services to improve the success rate of global projects.
Knowledge management services allow standard practices during
the collection and distribution of project information. Portfolio
management services make sure that consistent rules are deployed
across departmental and geographical borders in the project selec-
tion, prioritization, and allocation of resources. Health checks,
coaching, and training services can help program and project man-
agers across the globe to use the same processes, methods, and tem-
plates, and to master the communication and leadership techniques
essential to international initiatives.
• Organizational support—Global organizations, alliances, and
partnerships must adapt their processes and policies to provide
support to global project team members. Senior executives and
HR departments must understand the differences across corpo-
rate and country borders, to determine what elements can influ-
ence the motivation of the international working force. Emotional
intelligence, work-life balance, and international performance

appraisal systems are some examples of motivational factors to be
carefully evaluated.
• Global collaborative networks—Organizations are evolving
from multinational enterprises to international networks that aggre-
gate the main suppliers, producers, and customers with their sub-
contractors and service providers. These alliances and partnerships
are often sealed around a group of programs and projects. Senior
executives must understand the different challenges faced by the
global teams in order to define collaboration strategies during early
stages. Examples of these challenges are the different corporate
cultures and maturity levels in project management, processes,
and procedures.
1.8.3 Collaborative Tools and Techniques
The two last categories of the framework deal with different technology
areas that organizations can implement to foster collaboration on global
projects. The first step is to evaluate the requirements, investigate different
solutions to satisfy these needs, and then select, implement, and provide
basic training on the chosen technologies. Usually this is not enough to
obtain adoption of the new tools by global project managers and team
members. Organizations must use creative techniques to make the tools
known and loved by employees across the globe. When “loved” is too
strong a word, at least the project teams must see the benefits of the tech-
nologies in their daily tasks, such as reduced time required to moderate
meetings and prepare reporting, fewer misunderstandings, electronic
flows for document review and approval, automatic handling of basic
project management and communication tasks, and fewer and shorter
business trips.
• Basic tools and techniques—Simple tools are the foundation for col-
laboration across team members. We can take for granted the avail-
ability of telephones, e-mail, and remote access to corporate systems.
Are they used efficiently? Are people following simple “etiquette”
when exchanging messages? Other simple solutions might also pro-
vide a great help, such as shareable spreadsheets, websites dealing
with meeting times in various time zones, and tools that help orga-
nize meetings between people from different companies.
• Audio and video tools and techniques—Audio-conferences and
video-conferences are essential for any project team working in dif-
ferent locations. The main barriers are the technical difficulties to
start the calls—mainly when connecting equipment from different
companies—and the quality of sound and video. These elements
must be taken into consideration when evaluating the technical
solutions and preparing training and documentation to help the
meeting coordinators.
• Text and image tools, used during online meetings—Online
meetings are usually the best option, sharing images to improve
the meeting effectiveness, while using straightforward technol-
ogies. The principle is simple: establish (at the same time) an
audio-conferencing call and a web-conferencing session, then share
16 17 18 19 20
Collaborative Basic Audio Text and Knowlege Project
tools tools and video image sharing management
tools tools tools software
24 25
21 22 23 Collabor-
Collaborative Basic
techniques
Audio Online Knowledge
sharing ative
and video meetings
techniques techniques techniques PM
Figure 1.13. Global tools and techniques categories and knowledge areas.
work-6863
spreadsheets, mind mapping software, or presentations. While

ideas are gathered or the project status is reviewed, the discussions
are captured on the fly in a computer screen. The meeting partic-
ipants can visualize what is being captured and react (when they
disagree) or add more information. This reduces the probability of
misunderstanding and eliminates the need for late nights of writing
meeting minutes, and long delays to have them approved by the
meeting participants.
• Knowledge-sharing tools and techniques—There is a vari-
ety of tools that allow knowledge sharing, many of them coming
from the open source community. The most common for business
environments are content management systems (CMS) that allow
publishing project news, the collaborating on documents, and shar-
ing online tables to capture the risks, opportunities, issues, changes,
and stakeholders. More recently, project wikis allow the collabora-
tive writing of project documentation and online tutorials, and status
reports can be published and reviewed by different members using
blogs. Creative project teams are using these and other technologies
in a variety of ways to improve the quality of asynchronous commu-
nication (mainly across time zones) and remote collaboration.
• Collaborative project management software—There are technol-
ogy platforms that allow project team members to create and main-
tain the project management plan, to monitor the execution of the
deliverables, to share the project logs, and to obtain approval from
key stakeholders on documentation, business cases, and closing
reports. In global projects, the implementation of these platforms is
essential for all processes that require effective collaboration across
borders, such as defining activities, identifying and analyzing risks,
directing and managing project execution, m onitoring progress,
and controlling project work.
And finally, global project managers must be ready to face the chal-
lenges of cross-cultural communication, different organizations, skewed
time zones, multiple languages, and collaboration across locations. There
are at least 25 areas to be considered when planning a global project. The
Global Project Management Framework provides a comprehensive set
of practices and recommendations on these areas, aligned with organiza-
tional change variables. Global organizations can use the framework as
a starting point to detect which areas must be addressed before starting a
global project. An organizational change program can be put in place to
implement best practices in the main areas, improving the effectiveness of
communication, collaboration, and management across borders.
1.9 Public-Private Partnerships
1.9.1 Overview
A PPP is a long-term contract between the public sector (a Public Sec-

tor Client) and a private company or consortium of companies (a Private
Entity) covering the design, construction, maintenance, and financing of
an infrastructure asset. PPPs can take many different forms, but typically
have the following characteristics:
• A Public Sector Client enters into a contract with a Private Entity to

provide finance and arrange the design, construction, and ongoing
operation of an asset. “On-going operation” is usually limited to
maintenance of the asset (but may extend to the provision of ancil-
lary services, such as cleaning). The delivery of core social services
to the public (such as the provision of teachers at a school or med-
ical services at a hospital) typically remains the responsibility of a
government agency;
• the Public Sector Client undertakes to pay for use of an asset for a
specified term normally ranging from 15 to 35 years (the Concession).
The Concession represents a substantial part of the life of the asset;
• the Private Entity contracts out construction and facilities manage-
ment under fixed-price terms thereby passing construction and oper-
ational performance risk to sub-contractors where possible; and
• at the end of the Concession, ownership of the asset is returned to
the Public Sector Client, who can continue to use the asset.
A key distinction between PPPs and traditional procurement methods

is that the risks associated with the ownership and operation of an asset are
largely borne by the private sector rather than public sector. An example of
a Social Infrastructure PPP would be a hospital building financed and con-
structed by a Private Entity and made available for use by a local District
Health Board. The Private Entity then provides housekeeping, building
maintenance, and other non-medical services while the hospital authority
focuses on the delivery of core medical services. The principal contractual
relationships in a typical PPP are shown diagrammatically below:
1.9.2 Financing
PPP projects typically generate relatively stable and predictable cash

flows over the term of a Concession. Because of the nature of these cash
Public sector client
Contract to design, build Operations

and maintain the facility and maintenance
contract
Equity Private entity
providers (Concessioaire)
Design and
construction
contract
Debt
providers
Figure 1.14. The principal contractual relationships in a typical PPP.

Source: http://nzsif.co.nz/Social-Infrastructure/What-are-Public-Private-Partner-
ships/
flows, Private Entities can support relatively high levels of debt. While
debt levels are expected to be high initially (particularly, during the project
construction phase) debt typically declines over the term of a Concession
as it is repaid from operating cash flows. Further information regarding
maximum permitted debt levels for the PIP Fund can be found in Section
8 on page 21 of the prospectus and investment statement of NZSIF.
A Private Entity will typically fund the initial project costs, includ-
ing construction costs, through a mixture of long-term non-recourse
senior debt, subordinated debt, and equity. Ideally, where possible,
senior debt and/or an equity bridging facility is drawn first and equity
and subordinated debt are drawn toward the end of the construction phase
(usually two-to-three years) to minimize calls on equity capital until the
asset is operational.
1.9.3 Social Infrastructure PPP Revenues
Once a Social Infrastructure Asset becomes operational, a Private Entity

will receive revenues from the Public Sector Client for the remainder of
the length of the Concession, provided agreed service levels are met. The
revenues are typically inflation-linked and can be either “availability” or
“demand” based depending on the nature of the project:
Public sector client
1
4 2
Operations
Equity Private entity and maintenance
providers (Concessioaire) contract
Key
Debt
1 Concession payments
2 Facilities, aomtemamce costs
providers
3 Repayments of interest and principal
4 Distributions and returns of equity capital
Figure 1.15. An illustrative example of the cash flows received / paid

by a Private Entity for an Operational asset.
Source: http://nzsif.co.nz/Social-Infrastructure/What-are-Public-Private-
Partnerships/
• “Availability”-based projects entitle a Private Entity to receive reg-

ular payments from a Public Sector Client to the extent that the
project asset is available for use in accordance with contractually
agreed service levels.
• “Demand”-based projects entitle a Private Entity to receive pay-
ments related to the usage of the project asset.
The focus of the PIP Fund will be to invest in Social Infrastructure

Assets through PPPs with availability-linked payments made by a Public
Sector Client. The PIP Fund does, however, have the ability to invest in
demand-linked projects subject to certain criteria.
1.9.4 Cash Flows
An illustrative example of the cash flows received/paid by a Private Entity

for an operational asset is shown above Figure:
In a typical PPP, assuming an asset is held until the end of the Conces-
sion, the cash flows to/from equity holders occur in two phases:
1.9.5 Construction
During the construction phase, investors will be called upon to provide

portions of their committed capital—known as draw downs or calls—as
and when required. A typical build time for a new Social Infrastructure
Asset might be two–three years and equity would be called in installments
during this period.
1.9.6 Operation
Concession payments to the Private Entity typically commence once an

asset is constructed and considered operational (that is, available for use)
by the Public Sector Client. Revenues typically enable the Private Entity
to repay the construction and finance costs, pay for asset maintenance and
operation, and provide an equity return for investors. Equity investors can
receive an investment return on equity in the form of income (dividends
Income return Capital outflow/return Total debit
Construction
Operating phase
phase
Figure 1.16. The example of the annual cash flows to equity investors
and the amortization profile of project debt funding associated with a
hypothetical PPP project.
Source: http://nzsif.co.nz/Social-Infrastructure/What-are-Public-Private-
Partnerships/
or distributions of operating profits from PPP assets), periodic returns of

investment capital, and potentially capital gains on sale of investments
(if sold).
Typically, in the final few years of the Concession, once senior debt
and subordinated debt are repaid from asset operating cash flows, all of an
asset’s operating earnings will flow to equity investors (after providing for
any required latter year capital expenditure).
The chart below sets out an illustrative example of the annual cash
flows to equity investors and the amortization profile of project debt undo-
ing associated with a hypothetical PPP project.
• Equity outflows for investors typically occur during the implication

phase as projects are designed, built, and completed.
• Returns to equity investors during the operating phase are gener-
ated from Concession payments received from the Public Sector
Client and can have both an income and a capital component.
• Income returns comprise either dividends or distributions of oper-
ating profits (before tax) from the Private Entity. Capital returns
reflect periodic returns of investors’ invested capital. Capital returns
tend to increase as the outstanding balance of debt funding is repaid
over the term of the Concession.
• Cash flow streams are ideally relatively consistent during a Con-
cession but can vary as a result of capital expenditure required to
ensure the asset is returned to the Public Sector Client in a pre-
agreed condition.
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Index
A Co-venturers, 69
Anti-corruption, 4 CPE project charter, 70–72
Assessing HR capacity, 50–51 CPE project charter and alliance
Audio and video tools and agreements, 67
techniques, 24 CPE project management plan,
81–82
B CPE structure, 66–67
Basic tools and techniques, 24 CPE work packages, 111–112
Budget calculation, 78–80 Cross-cultural collaboration, 20
Cultural diversity
C diversity management
Cash flows, 28 approaches in organizations,
Change management, 18–19 40–41
Coaching, 20 leadership across cultural
Collaborative project management, context, 41–42
67 managing, 37–38
Collaborative project planning Cultural intelligence, 42–43
framework
approach, 83 D
benefits, 82–83 Dimensions of integration
CPE project management plan, methodology dimension, 16–17
81–82 people dimension, 16
Compensation and rewards, process dimension, 16
55–57 tool dimension, 16
Competitive advantage, 8–10 Disputes, 83–85
Completion guarantees, 126–127
Completion risk, 126 E
C-O-M-P-R-O-M-I-S-E, 85 Employee relations, 57–58
Conflict resolution, 20 Engineering progress plan, 113
Construction progress plan, 115 Environment, 4
Contention, 45 Equal employment opportunity, 48
Contingency, 105–107 Ethics
Cost and currency standards, 105 definition of, 5, 6–7
136 • Index
differences between laws and, H

7–8 HRM. See Human resource
governance and, 80–81 management
Exchange of information, 15–16 Human resource approach
culture between profitability
F and corporate social and
Facilitator core competencies, 87 environmental disclosure,
Framework for investigating team 11–12
effectiveness, 38–39 Hofstede’s study on, 10–11
Functional organization, 12 Human resource management
Funding risks, 124 (HRM)
compensation and rewards,
G 55–57
Global communication employee and labor relations, 50
creativity, 22 employee relations, 57–58
rules and templates, 21 equal employment opportunity,
stakeholders and communication 48
channels, 21 functions of, 47–50
strategy, 21 international, 39–40
techniques, 21–22 recruiting, selecting and talent
Globalization, international project assessing HR capacity,
management, 2–3 50–51
Global labor governance, 46–47 developing talent strategy,
Global leadership challenges, 42 52–54
Globally integrated enterprise forecast HR requirements,
(GIE) model, 41–42 51–52
Global organizations Lucidchart, 54
collaborative networks, 23 review and evaluation, 54
organizational support, 23 risk management and worker
PMOs, 23 protection, 50
project structures, 22 staffing, 48
selection of international human staffing in multinational
resources, 22–23 companies, 54–55
Global team leadership, 20 strategic HR management, 48
Global tools and techniques talent management and
audio and video tools and development, 48–49
techniques, 24 total rewards, 49
basic, 24 Human rights, 3
collaborative project
management software, 25 I
knowledge-sharing tools and IJV. See International joint venture
techniques, 25 ILO. See International Labour
text and image tools, used during Organization
online meetings, 24–25 Individual partner risks, 120–123
Governance, 80–81 Institutional theory, 45–46
Index • 137
Integration value overview of, 19

exchange of information, 15–16 Knowledge-sharing tools and
proactive steps, 15 techniques, 25
sequencing and alignment, 15
shared objective, 15 L
International human resource Labor, 3
management, 39–40 Labor standards, 46–47
International joint venture (IJV), Laws
67 definition of, 5–6
International labor standards, 46 differences between ethics and,
International Labour Organization 7–8
(ILO), 46–47 Leadership
International project management across cultural context, 41–42
characteristics of, 2 global challenges, 42
definition of, 1 in virtual team, 44–45
globalization in, 2–3 Leading diversity, 37–38
issue standards, 2–3 Lead project manager, 72–73
sustainability, 3–8 Lucidchart, 54
International project organizational
structures collaborative project M
enterprise Methodology dimension, 16–17
data on integration, 17 Multinational projects, 38
dimensions of integration, 16–17
functional organization, 12 N
integration of project Non-resource loan solutions, 124
management and organizational
change management, 14–15 O
integration value, 15–16 OBS. See Organizational
prerequisites to effective breakdown structure
integration, 17–18 Organizational breakdown
project matrix structure, 13–14 structure (OBS), 96–100
Organizational project risk plan,
J 116–117
Joint project planning meetings, Overall progress plan, 115
86–88
Joint ventures, 67–70 P
Partnership
K definition of, 67
Knowledge management temporary, 69
category and knowledge areas, Partner work breakdown structure,
20 101–102
collaborative tools and People dimension, 16
techniques, 23–25 Performance-based cost
global communication, 20–22 forecasting formula, 107,
global organizations, 22–23 109–111
138 • Index
PMF. See Progress measurement project stakeholder analysis and

framework systemic, 74–76
PMO. See Project management Project leader, 74
office Project Management Body of
PMU. See Progress measurement Knowledge (PMBOK® Guide),
unit 84
PPP. See Public-Private Project management office (PMO),
Partnerships 23
Process dimension, 16 Project management progress plan,
Procurement progress plan, 115 113
Progress measurement framework Project manager, 73–74
(PMF), 103–105 Project matrix structure, 13–14
Progress measurement unit Project stakeholder analysis and
(PMU), 105 systemics, 74–76
Project charter, 70–72 Project statement, 70
Project contingency, 105–107 Public-Private Partnerships (PPP)
Project definition, 70 cash flows, 28
Projected performance factor, characteristics of, 26
107–108 construction, 29
Project funding risk financing, 26–27
completion guarantees, 126–127 operation, 29–30
completion risk, 126 overview of, 26
funding risks, 124 social infrastructure revenues,
funding types, 124 27–28
non-resource loan solutions, 124
risk minimization process, 124, R
126 Recruiting, selecting and talent
Project goals and objectives, 76–78 assessing HR capacity, 50–51
Project integration management developing talent strategy,
budget calculation, 78–80 52–54
collaborative project planning forecast HR requirements, 51–52
framework, 81–83 Lucidchart, 54
CPE project charter, 70–72 review and evaluation, 54
CPE project charter and alliance Responsibility assignment matrix,
agreements, 67 99
CPE structure, 66–67 Rewards, 55–57
cultural norms, 85–86 Risk identification and process,
definition of, 65–66 117–119
disputes, 83–85 Risk management, 115–116
goals and objectives, 76–78 Risk management and worker
governance and ethics, 80–81 protection, 50
joint project planning meetings, Risk minimization process, 124,
86–88 126
partnerships, joint ventures, and Risk partnering, 119–120
strategic alliances, 67–70 Rules and templates, 21
Index • 139
S differences between laws and,

Scope creep and project change 7–8
control, 102–103 human resource approach
Scope management culture between profitability
cost and currency standards, 105 and corporate social and
cost updating and change environmental disclosure,
control, 112–113 11–12
CPE work packages, 111–112 Hofstede’s study on, 10–11
definition of, 93 human rights, 3
development of project, 94–96 labor, 3
individual partner risks, laws
120–123 definition of, 5–6
organizational breakdown differences between ethics
structure, 96–100 and, 7–8
organizational project risk plan, value chain and competitive
116–117 advantage, 8–10
performance-based cost
forecasting formula, 107, T
109–111 Talent management and
physical progress, 113–115 development, 48–49
progress measurement Team effectiveness, 38–39
framework, 103–105 Temporary partnership, 69
projected performance factor, Text and image tools, 24–25
107–108 Tool dimension, 16
project funding risk, 123–127 Total budget calculation, 78–80
real-life example, 108–109 Total rewards, 49
risk identification and process, Trust building, 20
117–119
risk management, 115–116 U
risk partnering, 119–120 United Nations Global Compact, 3
scope creep and project change
control, 102–103 V
value chain management, Value chain, 8–10
100–101 Value chain management, 100–101
Social infrastructure revenues, Video and audio tools and
27–28 techniques, 24
Staffing, 48, 54–55 Virtual team, 44–45
Strategic alliances, 67–70
Strategic HR management, 48 W
Sustainability WBS. See Work breakdown
anti-corruption, 4 structure
comparison chart, 6 Work breakdown structure (WBS)
environment, 4 definition of, 97, 99
ethics partner, 101–102
definition of, 5, 6–7 value chain, 100–101

Chapter 1

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International

Hamid Doost Mohammadian

MOMENTUM PRESS, LLC, NEW YORK

Copyright © Momentum Press®, LLC, 2019.

All rights reserved. No part of this publication may be reproduced, stored

First published by Momentum Press®, LLC

ISBN-13: 978-1-94944-938-9 (print)

Momentum Press Industrial and Systems Engineering C

Collection ISSN: 2372-3564 (print)

Cover and interior design by Exeter Premedia Services Private Ltd.,

Printed in the United States of America

A growing number of organizations take up an agile approach to projects

International Project; Project Management; International Project M

2.7 Leadership and Virtual Team 44

4.15 Organizational Project Risk Plan 116

Figure 1.1. Characteristic of international projects (Koster 2010). 2

Figure 2.6. The challenges of global leadership. 42

Figure 4.1. A project scope management. 93

Table 3.1. Facilitator core competencies (The International

with Management skills. Therefore, I chose to become an Industrial

I ­cooperated in fixing and reoperation of the NRI solar concentrated Stir-

On a self-employed base, I was consultant for the Minister of Energy

Prof. Dr. Hamid Doost Mohammadian

1.1 Definition of International Project

Globalization has brought us a more integrated and interdependent world

– Wide range of objectives

– High speed and time – Heterogeneous

Figure 1.1. Characteristic of international projects (Koster 2010).

1.2 Understanding the Issues

Globalization is the tendency of firms to extend their sales or manufac-

1.3 Sustainability and the Issue

The United Nations Global Compact (www.Unglobalcompact.org)

Figure 1.2. Sustainable performance and waste management.

CSR is, at this point, a self-regulated business policy that commits

and the environment. TBL, like CSR, commits the organization to

1.3.1 Laws and Regulations

1.3.2 Comparison Chart

By ethics, we mean that branch of moral philosophy that guides people

• Lower domestic business

• Lower FDI inflows

Figure 1.3. Transmission channels of corruption on potential output.

principles of an ideal human character. The principles help us in making

1.3.5 Key Differences Between Law and Ethics

Normative Personal Social ethics Professional

Figure 1.4. Types of ethics.

Figure 1.5. Difference between law and ethics.

3. The law is created by the government, which may be local, regional,

1.4 Competition and Value Chains

1.4.1 Value Chain and Competitive Advantage

Value chain describes activities within and around an organization and

To achieve a competitive advantage, the firm must perform one or more

Inbound Outbound Marketing

logistics logistics and sales

Product interrelations Market interrelations

Figure 1.6. Margin figure sustainable competitive advantage triangle.

1.5 Multiple Cultures with Human

#2.2 Transaction #1.2 Institutional

Cultural distance Cultural dimensions

Figure 1.7. Conceptual framework of culture in IB research.

1.5.2 The Effect of International Culture on

Three approaches critical to the success of multinational companies

• “Hybridization of culture” where aspects of the culture of dom-

• “Creation of a new culture” to addressing and handling the chal-

To avoid or at least to minimize the number of potential conflicts related to

Figure 1.8. The 12 habits of highly collaborative organizations.

The project matrix structure is a combination of the above-men-

In general, the specialists remain permanently under the authority of

2.7 Leadership and Virtual Team 44

4.15 Organizational Project Risk Plan 116

Figure 1.1. Characteristic of international projects (Koster 2010). 2

Figure 2.6. The challenges of global leadership. 42

Figure 4.1. A project scope management. 93

Table 3.1. Facilitator core competencies (The International

I cooperated in fixing and reoperation of the NRI solar concentrated Stir-

1.1 Definition of International Project

1.2 Understanding the Issues

1.3 Sustainability and the Issue

3. The law is created by the government, which may be local, regional,

1.5 Multiple Cultures with Human

1.5.2 The Effect of International Culture on

1.6.1 The Integration of Project Management

1.6.5.2 Recognition of the Role and Value of Change

1.7 Structured and Rigorous Approach

c ollecting information from geographically distributed team mem-

d istance, and good preparation of questions and the communication

spreadsheets, mind mapping software, or presentations. While